By Lynette Tan
If you’ve only got a minute:
- There is an increasing trend of tertiary students who need to work to support their family financially.
- Juggling work and the demands of studying can take a toll mentally and physically. Developing financial resilience can help working students withstand financial stress and hardship.
- It’s important to take a long-term view of building good financial planning habits beyond the current financial demands so that students and their families can have a financially stable future.
Juggling the demands of tertiary education with the pressures of a part-time job is challenging enough, but for students who also shoulder family responsibilities like being a caregiver or who support their family financially, the balancing act can be overwhelming.
This growing trend of students needing to assume financial responsibilities while pursuing their studies was recently highlighted in the media. While there is no official data on the number of students who study and work to support their families, social service agency Allkin Singapore said that it has seen a more than threefold increase in the number of post-secondary students aged 17 and above who needs to work while studying.
Unexpected life events, such as a sudden job loss or medical emergency, can further amplify these pressures, threatening to derail academic progress and family well-being. Financial resilience, the ability to withstand and recover from such financial shocks, becomes not just desirable but essential.
What is financial resilience?
Having financial resilience means you can withstand financial hardships, stressors and shocks due to unplanned life events.
It's not simply about having a large savings account. It's about having the systems and mindset in place to navigate financial challenges without sacrificing long-term objectives. For working students supporting families, financial resilience is paramount.
Strategies for Building Financial Resilience:
1. Budget right – focus on essential spends
To put it simply, a budget is a saving and spending plan. However, we all view money differently. Some people have no trouble saving while some may need help prioritising what they need to spend on. Prioritising essential expenses is the cornerstone of a sound budget. It is prudent to focus on the necessities like rent or mortgage payments, utilities, groceries, transportation, and childcare. These are the foundational expenses that must be covered.
Once these are accounted for, carefully review spending habits to identify areas for potential cuts. Tracking your expenses and looking at your spending patterns can help identify the areas that you can potentially reduce unnecessary expenses.
Subscription services, dining out, entertainment, and impulse purchases are usually the areas where reductions can be made without drastically impacting the quality of life. Consider cutting back on premium subscriptions, cooking more meals at home, and exploring free or low-cost entertainment options.
2. Maximising income
To maximise your part-time income as a student, strategically explore opportunities that align with your skills and schedule. High-demand part-time jobs like tutoring, online freelancing (writing, design, virtual assistant work), and customer service roles often offer competitive pay and flexible hours.
Developing valuable skills in areas like coding, data analysis, or digital marketing can further enhance your earning potential, and over time you can become a desirable candidate for higher-paying freelance or part-time positions.
As a student with limited hours for working, look at the per-hour pay to help you optimise your time earning money. Don't be afraid to negotiate a raise in your current role as well, if you have shown outstanding performance. Research the average pay for similar positions and highlight your contributions, reliability, and increased responsibilities to justify a pay increase. A well-prepared and professionally presented request can often lead to a significant boost in income.
The gig economy offers another avenue for supplementing your income with flexible, on-demand work. Platform companies allow you to set your own hours and earn extra money by providing services like ride-sharing, food delivery, or grocery shopping. However, do factor in the costs incurred, such as vehicle maintenance, fuel costs, and any platform fees when assessing the true profitability of gig work.
3. Building an emergency fund
An emergency fund is a stash of money set aside specifically to cover unexpected financial hardships. These hardships can range from sudden job loss and urgent medical bills to unexpected home repairs or home appliance replacements. It's a financial safety net designed to prevent you from going into debt or derailing your financial goals when unforeseen events occur.
Building an emergency fund doesn't require large lump sums. It's about consistent, manageable contributions. Start small, even with just S$20-S$50 per week or month, and automate these transfers into a separate savings account. The consistency of automated savings allows your emergency fund to grow steadily over time without requiring constant attention. Think of it as a "set it and forget it" approach to building financial security.
The goal for your emergency fund is to cover at least 3-6 months of essential expenses. Calculate your monthly essential expenses like rent, utilities, groceries, and transportation, and aim to save that amount multiplied by 3 to 6. Having this financial safety net can significantly reduce stress and provide peace of mind knowing you can weather unexpected storms.
4. Leveraging support systems
Be resourceful in looking for suitable support such as government schemes and community aid services. Your school may also provide guidance on available scholarships and bursaries. Student support groups and counselling services can offer emotional support and practical advice for managing stress and navigating the challenges of balancing work, studies, and family responsibilities. Actively utilising these resources can connect you with valuable support networks and financial assistance.
Open communication with your family is crucial in navigating financial challenges. Discuss your financial situation openly and explore collaborative solutions. Pooling resources, coordinating meal preparation to reduce food costs, or even exploring temporary co-living arrangements can significantly alleviate financial burdens.
5. Long-term financial planning
While your immediate focus is likely on managing current expenses and supporting your family, it's crucial to look ahead and establish long-term financial goals. Think about what you want to achieve in the future – perhaps homeownership or providing for your sibling's education. Defining these aspirations and estimating the amount will give you something to work towards and help you make informed financial decisions today.
Protecting your family's future is another essential aspect of long-term financial planning. While it may seem distant now, consider exploring health insurance and disability insurance options. These policies provide crucial financial protection in case of unforeseen events, such as illness, injury, or death, ensuring your family's financial well-being is safeguarded even if you're unable to work.
Starting these policies early often means lower premiums and ensures coverage is in place when you need it most. Even a basic policy can provide an invaluable peace of mind, knowing your family is protected no matter what the future holds.
Starting to invest early, even with small contributions from your part-time earnings, can make a substantial difference in the long run. The power of compounding allows your investments to grow exponentially over time. Consider low-cost index funds or robo-advisors, which offer diversified investment portfolios with minimal fees, making them accessible even on a student budget. Even small, regular contributions can accumulate significantly over time, building a strong foundation for your future financial security.
Conclusion
Building financial resilience as a working student supporting your family is undoubtedly challenging, but it is achievable with careful planning, disciplined spending, and resourcefulness. By focusing on strategies like creating a realistic budget, maximising your income potential, diligently managing expenses, saving and leveraging available support systems, you can navigate the complexities of balancing work, studies, and family obligations while building a secure financial future.
Remember, even small steps taken consistently can lead to significant progress over time. Your dedication and hard work today will pave the way for a more financially stable tomorrow for both you and your family.
